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MedPAC asks Congress to repeal SGR formula in its year-end report



April 05, 2013
Area(s) of Interest: Advocacy Payor Issues and Reimbursement 

In the latest debate surrounding government spending on Medicare payments, the Medicare Payment Advisory Commission (MedPAC) asked Congress to repeal the sustainable growth rate (SGR) formula in its annual report to Congress on Medicare payment policy.


Saying that the “need to repeal the SGR is urgent," the MedPAC Chairman, Glenn M. Hackbarth, told members of the House Ways and Means subcommittee on health that the most recent Congressional Budget Office (CBO) projections have substantially lowered the budget score for SGR repeal and may present an opportunity for Congress to act before the “score changes again.”


The CBO revised the budget projects downward for the cost to repeal the SGR formula from $244 billion in 2012 down to $138 billion for this year.


MedPAC repeated this call to action in a letter sent to the Centers for Medicare & Medicaid Services in late March, in which the commission responded to a new payment cut to Medicare Advantage plans. The letter underscored that the cycle of projected cuts and last-minute congressional patches to Medicare payment rates creates perpetual uncertainty that threatens the Medicare system.


"This process leads to confusion, uncertainty and dissatisfaction among physicians, and if this process continues, it could affect beneficiary access to care if physicians decide to leave the Medicare program or limit the number of Medicare beneficiaries to whom they provide care," the letter states.


The California Medical Association and the American Medical Association continue to urge Congress to eliminate the SGR formula and transition to a high performing Medicare program based on driving principles and core elements submitted to lawmakers last year.


The CBO estimates that the cost to repeal the SGR is now less than half the cost projected at this time last year. Congress should act now as members of the baby-boom generation are aging into Medicare at an average rate of 10,000 each day. The country cannot afford to wait.

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